Last October, I wrote an article about "Why Bitcoin Is Perfect for Libya." Nothing has changed since then. My country doesn't offer much support when it comes to online payments. We don't have Paypal (legally at least) and getting credit cards is hard,banking Is nightmare, etc.

The Slow Libyan Adoption of Bitcoin

When I talk about Bitcoin to my family and friends, they praise it, but they also don't want to open a bitcoin wallet. They don't need a new currency, since anything they can buy with bitcoin they can find cheaper in Libya. Most games and software programs here are hacked and sold very cheaply, compared to buying them online or in other countries.

That's why telling people here, "You can buy Photoshop with bitcoin" will result in "Are you kidding me? I can get it from the CD store next door for only five bucks!!"

Buying Physical Goods with Bitcoin

In my last article, I wrote:

Until now I haven't got anything physical with Bitcoin, as houses here don't have addresses, and things I've tried to buy from Amazon didn't reach my PO box. There are other ways, but I haven't tried them.

Even if I bought Amazon cards with bitcoin, not all sellers ship to Libya. (Those who do are quite few.) And for some reason, when I use a PO box for a shipping address, the parcels don't reach me, and this kind of shipment doesn't have tracking. Even if the item is lost on the way, I can never know.

I'm sure that if we could buy physical goods with bitcoin, I could convince a lot of my friends and family to make their bitcoin debut, especially with the prices and discounts on Amazon. That's why, from time to time, I try other methods for buying online and I finally found one.

Aramex: Shop and Ship

Aramex is a mail forwarding company that allows shopping from various countries worldwide. Aramex provides receiving addresses from 15 countries, including the US and the UK, and ships to 62 destinations. That means I can shop as local person from those countries and the items will be shipped to Libya.

The Lightning Network may well be Bitcoin’s primary solution to the issue of scalability, but many skeptics believe there are unresolved issues with this layer-2 system for the blockchain. The possibility of too much centralization via so-called “supernodes” is one of the common criticisms of the Lightning Network, and attached to that is the fear of these new, mostly -centralized payment hubs having the capacity to censor transactions.

Bitcoin Magazine recently reached out to BitGo Engineer and Statoshi.info creator Jameson Lopp to get his thoughts on the possible privacy issues associated with the Lightning Network.

Lightning Network May Offer Better Privacy

Although a loss of privacy is sometimes mentioned as a possible, negative aspect of the Lightning Network, the reality is that it may offer better privacy than the current base layer of the Bitcoin blockchain. This is mainly due to the fact that the blockchain is an open, mostly -transparent ledger that can be viewed by anyone via a block explorer.

Lopp made this point during an interview with Bitcoin Magazine:

“I expect that privacy will actually be better on the Lightning Network than on-chain because transactions are not broadcast to the entire network. It will be much harder to collect analytics on the Lightning Network because routing nodes only know the hop before and the hop after when routing, not the entire route.”

Although not perfect, the Lightning Network does offer the advantage of keeping information related to specific transactions away from an open, transparent ledger. Whether the Lightning Network can offer better privacy than a traditional bank account (where only the bank and the parties involved in a transaction know about it) is an unknown at this point.

Will Nodes Be Forced to Comply with AML and KYC Laws?

One of the main concerns associated with a Lightning Network that has a few entities running nearly all of the nodes is that these nodes will be forced to comply with Anti Money Laundering (AML) and Know Your Customer (KYC) regulations. To this point, Lopp responded, “I understand the AML/KYC fear, but routing nodes are non-custodial.”

Lopp went on to explain that BitGo has based its business around being non-custodial because it means it doesn’t have to deal with all of the regulatory issues associated with holding user funds.

The BitGo engineer also noted that the Lightning Network could still operate in an environment where the laws are changed to fit that regulation-avoiding model. Lopp believes that, much like the Internet, users could simply go around nodes with onerous requirements for routing payments. He added, “In that [scenario], we'll still see plenty of non-compliant nodes.”

A Never-Ending Battle of Privacy vs. Surveillance

It’s possible that the battle between privacy and surveillance will never end. Having said that, those attempting to break privacy on the Internet are usually responding to new technologies created by privacy-minded individuals and organizations.

At this point, it appears that an attack on the level of privacy offered by the Lightning Network would be similar to an attack on the Tor network. Lopp told Bitcoin Magazine, “I imagine that they would need to be a well-funded attacker in order to be able to watch a significant portion of traffic.”

“I foresee a Tor-style arms race in the future on two fronts,” Russell told Bitcoin Magazine. “One will be the battle against analytics (such as timing attacks) and bugs. The other will be against centralization, which as Bitcoin is learning, is a hard problem that, which is mainly met by (1) making it easy to decentralize, and (2) making sure people are aware of the danger.”

There are always tradeoffs between privacy and usability. Zcash appears to be the most privacy-conscious blockchain today, but there are a few issues with the system when it comes to efficiency. Open Transactions could also be used to implement truly anonymous digital cash, but the federated server model in that system is not as secure as a blockchain (or even the Lightning Network) when it comes to control over one’s funds.

IBM today announced a new framework for securely operating blockchain networks, as well as new services on the IBM Cloud that meet stringent regulatory and security requirements. According to the company, IBM has created essential new cloud services for tamper-proof, trusted blockchain networks.

"Clients tell us that one of the inhibitors of the adoption of blockchain is concerns about security," said Jerry Cuomo, vice president of Blockchain, IBM. "While there is a sense of urgency to pioneer blockchain for business, most organizations need help to define the ideal cloud environment that enables blockchain networks to run securely in the cloud."

IBM is launching several initiatives to address the security needs of clients, startups, and developers, including cloud services with the highest Federal Information Processing Standard (FIPS) 140-2 and Evaluation Assurance Level (EAL) in the industry to support the use of blockchain technology in government, financial services and healthcare.

"Blockchain is a highly innovative and promising technology. However there are a lot of issues to be solved for enterprise systems," said Eiji Ueki, director and executive vice president of NTT DATA. "IBM’s new blockchain cloud service is directly trying to address those issues. We believe this will help accelerate the maturation of blockchain technology."

IBM is offering new cloud services to help businesses quickly host secure, tamper-resistant networks and scale to thousands of users, including tamper-resistant storage of crypto keys and services to enable blockchain peers to run in protected environments to prevent leaks through shared memory or hardware. According to the company, the new cloud services achieve the ideal criteria for cloud-based blockchain networks by providing an auditable operating environment with comprehensive log data that supports forensics and compliance.

"When considering a cloud environment for a blockchain network or in a regulated industry, organizations must ask the right questions because not all cloud environments are equally secure," Cuomo told Bitcoin Magazine. "A trusted cloud environment is critical to many industry compliance requirements. To address this, IBM is launching new blockchain services on the IBM Cloud that can help organizations in industries such as banking, healthcare and government.”

IBM is a premier member of Linux Foundation’s Hyperledger Project, a collaborative effort started in December to establish, build and sustain an open, distributed ledger platform that will satisfy a variety of use cases across multiple industries. "The Linux Foundation believes a shared infrastructure that is open to critical inspection and collaboration will be pivotal in driving global adoption of blockchain for distributed ledgers," Linux Foundation executive director Jim Zemlin told Bitcoin Magazine in an interview.

In February, Bitcoin Magazinereported that IBM is making tens of thousands of lines of code available to the Hyperledger Project to help developers easily build secure distributed ledgers that can be used to exchange most anything of value. IBM is persuaded that Hyperledger could make blockchain-based services faster, more scalable and easier to use, and expects Hyperledger software to provide special advantages for owners of IBM hardware.

Now, IBM intends to make it easier to use IBM’s code based on the Hyperledger Project in any environment, including its cloud Platform as a Service (PaaS) Bluemix, and is offering Bluemix services to help developers quickly build applications. For application developers who want to get a blockchain environment running almost instantly and start building applications, the beta release of IBM’s blockchain on Bluemix provides access to the very latest Linux Hyperledger code, updated as the code continues to emerge.

“Bluemix Services make it easy for Factom developers to work with IBM blockchain code,” said Paul Snow, chief architect of Factom. "IBM is the single largest contributor to open source technology, and the Internet would not be what it is today without their contributions. Exploring blockchain technology with IBM is exciting, and our approaches are complementary. We are thrilled to see how they will help grow the industry."

For organizations that need the flexibility to run blockchains on different cloud servers or devices, a signed, certified distribution of IBM’s code submission to the Hyperledger project is now available on Docker Hub, a cloud-based registry service for building and shipping application or service containers. Ongoing updates will provide new features, including dashboards, analytics, chat support and exclusive network services.

Timo Hanke, a mathematical researcher and cryptocurrency expert, in collaboration with Sergio Demian Lerner, a renowned security expert, has developed a new Bitcoin mining method that can increase mining revenue by up to 20 percent, translating to an increase of $30 million in annual profits if used by one of the biggest mining pools.

The patent pending method available for licensing “involves a new design of the SHA 256 hash-engines (inside the ASIC) and an additional pre-processing step as part of the mining software (outside the ASIC)” according to the whitepaper. Through parallel processing, it re-uses “outputs that would otherwise be created and discarded on a continuous basis.” Furthermore, it achieves gains on top of other optimizations such as “timing, pipelining, path balancing, custom cell and full custom designs.”

The new technology is a result of algorithmic discoveries that “were widely believed to be impossible,” allowing for a reduction in chip silicon area and lower power consumption by using fewer gates for each hashing core. This shortcuts the number of computations required for mining, as the mining hardware can re-use information acquired over time or share information with other hashing cores.

“Chip designers get a game-changing improvement over whatever they already have achieved today,” says technology inventor Hanke. “For the Bitcoin mines of the future, AsicBoost will make all the difference between a profitable and an unprofitable mine.”

The results have the potential to lead to a dramatic improvement in performance in a zero sum industry where every little gain counts.

The Arms Race in Bitcoin’s Mining Industry

Bitcoin mining has always been a competitive endeavor with the short-lived CPU mining period quickly giving way to GPUs, followed by ASICs. Considered an arms race as each hash-share gain increases profits at the expense of competitors, competition is intense, with hardware constantly improved and older versions quickly becoming obsolete.

A dramatic illustration can be seen during a three-month period between December 2015 to March 2016 when difficulty more than doubled from 75 petahash to 175 petahash, more than halving the reward for mining hardware in use during December 2015. The increase in difficulty followed an increase in price which reached a low of approximately $170 in 2015 to stand currently at $440.

The stakes can be high. Aquifer filed for bankruptcy in February 2015, claiming Bitcoin mining-related losses between $1 million and $10 million. In the same year, BTC Guild, one of the oldest mining pools, closed. Mining companies, therefore, are in constant search for more efficiency, leading to specialization.

Some miners, such as Genesis Mining, provide customer-focused services, such as cloud mining. Other companies, such as F2Pool, own no hardware, focusing instead on running a mining pool used by cloud mining providers, innovative mining businesses such as HaoBTC or small miners with few terahashes. Still other miners, such as BitFury and Antpool/Bitmain, design their own hardware and sell mining hardware to the public, as well as running a mining pool.

The current level of profitability for mining farms, which employ rows upon rows of mining hardware, is unclear, with few willing to provide concrete numbers. Jihan Wu, cofounder of Bitmain, one of the largest mining pools and home of the recently announced Antminer S7, told Bitcoin Magazine that the level of profitability depends on electricity prices as well as the cost of mining rigs, but he could not provide specific numbers.

Meanwhile, BitFury launched a new 16nm SHA256 ASIC to “deliver the maximum performance and efficiency possible” according to its website. BitFury recently announced an investment in BitPesa for an undisclosed amount as well as a new project to build a “blockchain-based property registry” having previously donated $100,000 to MIT’s Digital Currency Initiative developers fund, according to Alex Petrov of BitFury who told Bitcoin Magazine that it was BitFury’s initiative to create the fund which supports Bitcoin developers.

With mining revenue dependent on the strength of the Bitcoin ecosystem, and as its profits grow through efficiency gains, we may expect more investments and diversification. Meanwhile, the mining-efficiency race, which has built the world’s most powerful supercomputer to secure the $7 billion Bitcoin ecosystem, continues.

Or how to build paranoid infrastructure on top of AWS

Three and a half years ago, Coinbase launched using a simple hosting platform: Heroku.

It was the right solution at the time. With just two technical founders building the product (neither with any serious dev-ops experience) we knew that Heroku would be more battle tested than any solution we could hack together on our own.

But we also knew this wouldn’t work forever. Early in our company’s history, we started to contemplate the next version of our infrastructure that we would run inside AWS. It had to be built from the ground up with security in mind (the most common ways that bitcoin companies die is due to theft and hacking) but we didn’t want to compromise on engineering happiness and productivity.

After about a year, we finally completed the transition and we’ve been running inside AWS for quite some time now. This post outlines some of what we learned during the transition. It can be used as a starting point to design paranoid and useful infrastructure in the cloud.

Today, Coinbase securely stores about 10% of all bitcoin in circulation.

One of Bitcoin's most important security features, a crucial property that makes the system trustless, is its open source nature. Because Bitcoin’s code is open source, anyone able to read code can check for themselves whether it does what it's supposed to do.

Plus, as per Linus's Law: Given enough eyeballs, all bugs are shallow.

But open source code doesn't necessarily eliminate all risk. Users still need to trust that the software they run on their computers actually reflects the open source code as it should. To eliminate this risk, Bitcoin developers have developed a fierce security policy which goes beyond the open source nature of Bitcoin itself: “Gitian Building.”

Gitian Building is even increasingly embraced by the wider open source community. Development teams behind Tor, Debian, Mozilla and other open source projects are embracing the practice spearheaded by the Bitcoin Core development team, and it might very well become an open source standard before long.

Here's why Gitian Building is important, and how it works.

On Source Code and Binaries

The problem that Gitian Building solves, at its heart, is that humans and computers do not speak the same language.

Bitcoin Core is written in C++, one of several programming languages. Programming languages – while obviously very different from actual languages – can be written and read by humans. And it's this C++ code that's open source, and therefore checkable and verifiable.

But computer CPUs cannot actually read these programming languages. Instead, CPUs have their own “machine language”: binaries. Binaries, as the name suggests, are often represented as “ones” and “zeros.” But more important: binaries are not readable by humans.

For a program written in human readable code (such as C++) to be executed on a computer, it must be “translated” into binaries. This “translation” process is called “compiling,” and is done using special software: a compiler. Someone, somewhere needs to compile code into binaries.

If it weren't for Gitian Building, the compiling process would present a potential single point of failure.

The Risk

So what, exactly, the risk if there is no Gitian Building process?

Let's say that Wladimir van der Laan, Bitcoin Core's lead developer, is tasked with compiling Bitcoin Core's code into binaries. This would mean he’d have to insert C++ code in the compiler installed on his computer, and the Bitcoin Core binaries come out on the other end. He then distributes these binaries through bitcoin.org, bitcoincore.org and perhaps other platforms.

The problem is obvious. While anyone able to read C++ can check and verify Bitcoin Core's open source code, they still need to trust that the binaries as published by Van der Laan reflect this same code.

But if, for example, Van der Laan’s computer is compromised, his compiler could be replaced with software that creates malicious binaries instead ‒ perhaps binaries that look like Bitcoin Core when running on a computer, but that actually steal bitcoins. Or, Van der Laan might be coerced by someone with nefarious intentions, and is forced to publish malicious binaries. Or perhaps Van der Laan will one day go crazy and intentionally spread malware himself.

It's unlikely anyone would realize any of this until it's too late; while the code is open source, no one can actually read the binaries.

Gitian Building

The easy way to solve this problem would be to have several developers all build binaries from the same code and cross check these binaries against each other. If their binaries are identical, they know the binaries are accurate, and none of them would be compromised. Plus, anyone else could compile the binaries, too, and check whether the developers are still acting honestly. This type of cross checking would eliminate a single point of failure.

Unfortunately, it's not that simple. Binary building is a very unpredictable process, involving many variables. If different developers for instance use different compilers, different operating systems, or even compile the binaries at different times, the binaries might look very different. This makes simple cross checking useless.

Gitian is an open source software program that offers what is known as a “build environment.” A build environment is perhaps best described as a “computer within a computer,” but with a specific purpose: a virtual space to compile binaries, completely free of any variables. “Gitian Building,” the process of compiling binaries in Gitian, ensures that whatever computer is used, the binaries turn out exactly the same.

This, in turn, enables different developers to reliably cross check their binaries against each other. And, of course, it allows anyone else to verify whether the binaries match the source code as well.

For a more in-depth explanation of Gitian Building, see this CCC-talk by The Tor Project's Mike Perry and Electronic Frontier Foundation's Seth Schoen:

Blockchain and digital health services could be a perfect match for each other across a variety of applications. From distributed interoperable health records to proof of adherence for medication, the healthcare industry is ripe for digital innovation. More generally, technology is a hyper-deflationary force, and this could be particularly effective in delivering quality health care through more effective channels such as mobile apps.

Investments in the digital health space have increased significantly in the past two years. This is largely possible because of improved low-power sensors and user-friendly cloud platforms that interface with those hardware devices. TheRock Health Funding Database shows a $4.5 billion increase in venture funding in digital health from 2014 to 2015.

Smart contract technology is built on top of virtual currencies such as Bitcoin and is a hallmark of "Bitcoin 2.0" platforms. Blockchain is the fundamental infrastructure needed for Bitcoin transactions to work, and an enabling technology for the next generation of asset-based platforms.

A smart contract is simply a piece of code that is stored on the blockchain. It can be triggered by particular blockchain transactions and, in return, read or write data to that blockchain. The rise of smart contracts can be understood in the framework described by Carlota Perez in her excellent book, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages.

Essentially, most technological revolutions have two phases: the first where the groundwork is done, called the installation phase, and the next, focused on innovating and building on the groundwork, called the deployment phase. For example, in the installation phase of the Internet revolution, most companies built the core infrastructure to make the Internet available to the general public. In the deployment phase, companies started building applications on top of the infrastructure such as social media services. Blockchain development is in the installation phase and smart contracts will be part of the deployment of its infrastructure.

There are four major areas where the blockchain and smart contracts can become deeply integrated into digital health.

Smart Property Management: Tracking Medication

Blockchain can bring the same level of trust and accountability to supply chains as it does with currency or financial assets. The decentralized management of a pharmaceutical supply chain through tamper-evident technology can be really beneficial in tracking counterfeit drugs. This use case is a supply chain issue that was brought up by Primrose Mbanefo from Accenture in a working group meeting of the Hyperledger Project.

Mbanefo pointed out that consumers want reassurance for the fact that the drugs they take actually contain the active ingredient and in the appropriate proportions as advertised. According to Mbanefo, the counterfeiters are failing to include the right amounts of active ingredients in medicines and this issue can be addressed by making the supply chain more transparent. The blockchain could provide proof of origin to verify that a particular shipment of drugs actually came from a specified factory or manufacturer.

IBM also is working on the issue of supply chain transparency through privately deployed blockchains for an enterprise. With the addition of Watson, supply chains can be managed as a smart property that self-reports, proving the authenticity of a drug at every stage of its manufacture, delivery and eventual consumption.

Public Health Banks

For a patient visiting the hospital, there are accurate records on the symptoms and conditions, tests ordered, treatments offered and the outcome. In the near future, records on patient treatment plans could be released (upon consent) anonymously into public health banks, which are decentralized networks where information is managed and coordinated through a blockchain.

Then, public health institutions can form smart contracts with these health banks to broadcast alerts or potential threats to partner hospitals or healthcare providers. For such a health bank, accessing information would be cheap or free, but posting or broadcasting to all nodes would cost significantly more. In this manner, the network can sustain itself through revenue from its partners. From the patient side, this process is not much different from checking a box to "send anonymous usage data" that we often do in apps today. The data available from such a health bank can provide population statistics and trends that may not be visible from a “micro-scale” view of individual patients.

Aside from the data, the blockchain can facilitate an electronic health record (EHR) system that can manage access to data between multiple parties at the scale of a health bank. Currently the Precision Medicine Initiative is building the technology core and infrastructure that would power the collection and storage of biological data (such as conditions and treatments) of more than a million volunteers.

Universal EMRs: Health XML

Currently, all medical records associated with patients are stored in closed databases called practice management suites. Most hospitals and private clinics use different vendors for their practice management suites and most of them maintain that data in silos. Recently, there has been more of a push to move this data into the cloud in a format called Electronic Health Records (EHRs). The hope is that the use of EHRs will standardize the storage of patient data and allow for better interoperability between different healthcare organizations.

This process will also make it frictionless for patients to access their own medical data – like sharing a collection of photos via Google Photos. The administrator simply selects the data objects that the patient requested and generates a link to share them. This unique link will be sent to the patient, and he or she can open it up to view all the data released by the hospital.

The blockchain can be used to manage the distribution of those encrypted datalinks per patient based on addresses. The infrastructure for storage (the blocks) can be constructed in such a manner that each block corresponds to a specific type of data, for instance, tagging a block with metadata to separate a block storing links for scans from another block storing the links for medication. Then the front-end wallet could retrieve these blocks and use the metadata as a health-XML language to put them together in a patient profile. Simple transactions can be used to verify the patient and unlock each block, putting together that profile for a patient in a secure manner.

Once the data is in the cloud, a variety of computations can be performed on it. In the future, doctors can prescribe the use of devices like Fitbit for improving personal health. Smart contracts can be implemented on personal fitness data and act as a rewards program for improving health per visit to the doctor.

Proof-of-Adherence

Recent studies in mobile health on management of chronic conditions and medication through apps has brought attention to smartphone-enabled medication adherence programs. The goal of these programs is to provide a self-management framework for patients that leads them to just the right level of medication based on their physiological data. These programs are turning out to be effective; if patients don’t experience severe side effects, they show high-levels of adherence toward their medication [1].

Most of these programs are either powered by text messages or using simple server-client mobile apps. As the patients go through those programs, a tremendous amount of data is automatically recorded on patient behavior. This data is further analyzed to develop best practices and patterns.

An extension to the health-XML idea mentioned above can be used to run these clinical trials on a small portion of the population. The patients can be divided into cohorts based on their physiology and the data can then be reported on the blockchain. Some of the labor intensive processes can be replaced or partially automated based on recommendations made by intelligent agents who are reading a blockchain and establishing an average baseline for each cohort.

These intelligent agents would be available on-demand and work for a limited period of time on a subscription basis. The subscription would be powered by a deposit made by the administrator monitoring the cohorts. This bot-economy will use the blockchain as the infrastructure that the intelligent bots can consume. The more sophisticated bots will be "hired" more often and, in this manner, companies can design bots adaptively to provide recommendations to the administrator as the data changes.

Blockchain-based technologies will become the foundation for digital innovation that can reach millions of lives. A unique combination of artificial intelligence, smart contracts and the blockchain will become the nervous system of our society, helping us live longer and healthier lives.

Although Bitcoin is more than 7 years old, making payments on the network is still a rather cumbersome task. With a user interface that requires users to send money to long strings of letters and numbers rather than human-readable names, it’s no wonder that many individuals have a hard time figuring out how to use this new financial technology.

The Payment Protocol creates a method of communication between a merchant and their customers before a payment is made. This communication protocol allows customers to see human-readable payment destinations, which can be authenticated via digital signatures. The protocol also creates a proof-of-payment for the customer, and it automatically provides a refund address to the merchant from the customer’s wallet.

This version of the Payment Protocol has been helpful in creating a checkout process for merchants that is similar to other options on traditional point-of-sale systems.

How Does BIP 75 Improve Upon the Payment Protocol?

One of the main downfalls of BIP 70 is that it doesn’t work well for P2P payments. While it gets the job done for transactions between a customer and a merchant, Bitcoin wallets are unable to receive payment requests when they’re offline. Store-and-forward servers can be used to forward new payment requests to wallets when they come online, but this setup creates new privacy and security concerns. BIP 75 is an attempt to solve this issue by encrypting all communication in the Payment Protocol end to end.

“By adding encryption at the application layer we create secure private communications, even in the case where there is a store and forward server for mobile or desktop wallets,” Netki founder and CEO Justin Newton, who co-authored BIP 75, told Bitcoin Magazine. “This additional encryption also protects the users in the case that the transport layer security is compromised.”

BIP 75 also allows the sender of a payment to create a cryptographically-signed invoice request for the receiver. This enables the receiver to validate the identity of the sender before they release an address in the returned payment request. Then, the receiver sends the encrypted payment request back to the sender.

“A digital signature exists only in the Payment Request message portion of the BIP 70 process, and therefore, the signature is only from the receiver. In BIP 75, there are digital signatures from both parties (via certificate signatures) as well as message signatures from each side to prove ownership of the messaging keys, which are used to calculate the encryption key for the Payment Protocol transaction.”

The human-readable names used in this updated version of the Payment Protocol make the entire payment process much more user-friendly. Personal logs of transactions are also improved because the names of people from past transactions are stored in a log rather than just a list of random Bitcoin addresses.

Wallet Names

The Wallet Names discussed in BIP 75 would allow users to store static domain-style names, such as kyle.bitcoinmagazine.com. This enables what essentially amounts to address books in Bitcoin wallets. Wallet names can be mapped to BIP 32 wallets, which means users can use a single address for all payments without compromising on privacy. A new Bitcoin address is generated for each payment to avoid address reuse.

In terms of how Wallet Names are mapped to Bitcoin addresses in this system, Newton told Bitcoin Magazine:

“Wallet Names can point to a web address where the sending wallet can retrieve a unique address per transaction via a BIP 21 formatted response, or can initiate a BIP 75 Payment Protocol transaction, resulting in a signed Payment Request (including a unique address) generated by the receiving wallet.”

With this BIP implemented, Bitcoin wallets will look less like the early days of the Internet and more like modern payment applications such as Venmo.

Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured onVICE Motherboard, Business Insider, NASDAQ, RT’s Keiser Reportand many other media outlets. You can follow @kyletorpeyon Twitter.

Wednesday, 27 April 2016

The first hour is spent talking with Jodi James of the Florida Cannibis Action Network.Then we talk with Tatiana Moroz about her joint venture with Zhou Tonged on May 2 in NYC as an after party during consensus.Then Dimitry of Mycelium gives us the latest updates on the wallet.Original air date on LogosRadioNetwork

This popular article and its infographic, originally published on November 15, 2015, have been updated by Michael Gord to reflect the major developments since then in the world of Bitcoin and blockchain. In the fall of 2015, BitPay and BTC Media (parent company of Bitcoin Magazine) commissioned Josh Dykgraaf, an artist based in Amsterdam who specializes in 3D and photo illustrations, to design an infograph as a guide to navigating the emerging Bitcoin and blockchain ecosystem. The infographic has been so popular, and the growth in the ecosystem so dynamic, that BTC Media commissioned Dykgraaf to create an updated poster which made its debut in March at SXSW®, and is available as a digital download or printed copy.

On January 3, 2009, the Genesis block, or the first block in the Bitcoin blockchain, was created. In the coinbase parameter, there was a simple message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” From that one block, Bitcoin was born.

Bitcoin has come a long way from that initial statement by Bitcoin’s pseudonymous founder, Satoshi Nakamoto. The technology is growing up and changing, from its early days as a project adopted by impassioned technologists and libertarians to a technology widely researched and used by financial institutions worldwide.

Bitcoin had a rough road ahead of it, as did many early technologies, including the Internet. It dealt with newspaper headlines lambasting Bitcoin because of its connection to Silk Road and drugs. Early adopters suffered millions of dollars in losses when early exchange Mt. Gox imploded. “Bitcoin is Dead,” many prophesied.

And yet, as Bitcoin approaches its eighth birthday, we see things changing. It is turning into that curious, wide-eyed technology with ideas as widespread as any normal eight-year-old. Cross-border payments, machine-to-machine transactions, smart contracts, microtransactions and stock settlements all have been discussed and developed. Nothing is off limits; no question goes unasked.

From the early days of mining using a laptop computer, now Bitcoin miners have industrial-sized data centers with hundreds of thousands of high-powered, specialized machines. In January 2014, the Bitcoin network hashrate was only 10 million GH/s. Today, it is more than 1 billion GH/s and growing quickly as new mining machines are built and sold. Around January 2014, there were around 50,000 Bitcoin transactions daily. That measure of network utility has increased to more than 200,000 Bitcoin transactions daily.

A big part of this growth in transactions is linked to the growth in Bitcoin-accepting merchants. In mid-2014, there were approximately 65,000 merchants who accepted Bitcoin. Now, there are more than 100,000, which represents a 50 percent increase. TigerDirect, a publicly traded online electronics retailer, has seen incredible results. Of all the buyers that used Bitcoin, 46 percent of them were brand new to TigerDirect. Further, orders placed with Bitcoin were 30 percent larger.

BitPay, a Bitcoin payment processor, also has seen a significant increase in volume. It announced in a blog post written at the beginning of 2016 that it has experienced a transactional increase of 50 percent in the last two months and an increase of 110 percent in the past 12 months. BitPay also saw record-breaking months for Bitcoin transactions in November and December of 2015, with more than 100,000 BitPay invoices processed each month. BitPay explains in the post, “At these rates, every 25 seconds a shopper somewhere in the world was spending Bitcoin at a BitPay merchant.” In Latin America, total transactions were up 1,747 percent in 2015. Bitcoin as a tool of transaction is growing.

Bitcoin as an asset class is also maturing. For the majority of 2015, the price stayed relatively nonvolatile and constant, fluctuating between $200 and $300. It was only toward the end of 2015 that the price experienced a significant increase, reminiscent of the early years, to finish the year as the world’s top performing currency (down from -67 percent in 2014 to +35 percent in 2015). From January 1, 2013 to January 1, 2014, the price went from $13.41 to $808.05, going as high as $1,147.25 on December 4. Just one month earlier, on November 4, 2013, the price was $225.20. Even the “bubbles” in Bitcoin are maturing. On the other hand, the market cap of Bitcoin is down from an all-time high of nearly $14 billion to around $6.5 billion at the time of writing.

Regulations are also changing. Before, there were politicians decrying Bitcoin because of its use on the underground marketplace Silk Road. Now, organizations such as Coin Center and the Chamber of Digital Commerce work to help these politicians and regulators draft rules that will ensure Bitcoin can continue to grow worldwide. New York has led the regulatory charge with its recent BitLicense initiative. The European Union also recently ruled that Bitcoin was not subject to VAT, providing significant clarity for those participating in the ecosystem.

Finally, the development of blockchain companies and enterprise solutions continues to grow. In 2015, Bitcoin and blockchain enterprise development generated over $1 billion in capital investments, with the first quarter of the year surpassing the total amount of funding for the entire previous 12 months. To date, more than 65 banks and financial institutions have made investments in the industry, and businesses in diverse fields ranging from health care to insurance to global supply chain trade networks have entered the arena.

The year 2016 has seen Augur, a decentralized prediction market, announce that it had raised $5.1 million in a crowdsale. Ethereum, the smart contract and publishing platform, raised $18.4 million in its own crowdsale. It is expected that OpenBazaar, the completely decentralized peer-to-peer ecommerce site, will launch in the coming months. Blockchain technology is rapidly ushering in a new world of data integrity that will impact industry and commerce on a magnitude comparable to the dawning of the Internet.

Bitcoin is not just on the fringes anymore; it is becoming mainstream. Whether it's miners, payment processors, wallets, developer tools, large-enterprise blockchain solutions or innovative new fintech accelerators, the reality is simple. Bitcoin and its blockchain are growing up. And the future they are opening to the world is as vast as that unlocked by any of the greatest technologies in history.